There is no grid emergency (at least for the next five years)

The grid operator for the mid-Atlantic region released a long-anticipated study about whether coal and nuclear plant retirements present a threat to its electric supply.

The study found there’s no immediate threat over the next five years. But it found that under some scenarios — a perfect storm of plant retirements, pipeline failures, and extreme weather — there could be problems in the future.

The study was conducted by PJM Interconnection, the nation’s largest electricity grid, which serves around 65 million people in 13 states and the District of Columbia. PJM initiated the study to find out if the increasing reliance on natural gas, which accounts for a third of its power generation, poses risks in the future.

Developers have proposed 40 natural gas power plants in Pennsylvania, and natural gas has overtaken coal as the country’s top electricity source.

Because of this, coal and nuclear plants have been shutting down. And the Trump administration has been considering a federal bailout for struggling coal and nuclear plants, an idea that PJM opposes.

Ohio-based utility company FirstEnergy has asked the Department of Energy to declare a grid emergency to help keep its struggling coal and nuclear plants online.

PJM CEO Andy Ott said a federal bailout wasn’t needed.

“We think government intervention is unnecessary,” Ott said. “It would inefficient and more costly.”

PJM’s study found its system has plenty of power on-hand to make up for those closures — at least for the next five years.

Ari Peskoe, Director of the Electricity Law Initiative at the Harvard University, said the study provided little support for those in favor of the plan to bail out FirstEnergy’s coal and nuclear plants.

“Had they found an immediate need, then that would have supported FirstEnergy’s case,” Peskoe said.

Though no crisis is imminent, Ott said if plants begin to retire at a higher rate, there could be problems. PJM ran 300 simulations in a kind of  “stress test” for its system. In some extreme scenarios, like if the rate of retirements speeds up, and a natural gas pipeline failure coincides with a two-week “bomb cyclone,” there could be problems.

“Under those scenarios we’ve seen there is a risk if all that comes together at the same time,” Ott said. “As a system operator it’s my job to avoid such things.”

To deal with those potential shortages, Ott said PJM could look to tweak the way it values different types of electricity generation in the next few years. That could include making ratepayers pay more for electricity from “fuel secure” plants, like coal and nuclear.

“There is a scenario where — especially during winter operations — that we could say, OK, fuel-secure resources are worth more,” Ott said.

Ott said PJM doesn’t have to act right away on this, and suggested that PJM could wait until 2020 to take action.

A final version of the study is expected in December.